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21 December, 02:56

Which of the following generate the type of externality described? Check all that apply. Your roommate, Kate, has bought a puppy that barks all day while you are trying to study economics. A leading software company has decided to increase its research budget for inventing new open-source technologies. Clancy has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the autumn foliage season. The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.

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  1. 21 December, 06:07
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    A negative externality is a cost that a third party incurs from someone else's economic activity. When the third party experiences a beneficial effect, it is called a positive externality.

    Requires the government to impose a tax.

    EX:

    Your roommate, Dmitri, has bought a bird that keeps you up at night with its chirping.

    The local airport has doubled the number of runways, causing additional noise pollution for the surrounding residents.
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